NEWSCAUSE MARKETING

I try not to consume much, but when I do, I like to buy products that make me feel morally superior. Chances are, you do too. Right? My point is not that we're better than everyone else and therefore have the right to be smug (even if we do); my point is that there is an obvious niche market for consumers who pay close attention to where their goods come from and where they can go when they're done with them. But do these companies have--either an externally imposed or internally genuine--moral obligation to the greater good?

Mark Dwight, Founder and CEO of Rickshaw Bagworks says yes. He left his last company when he told the Board that they had a moral imperative to stop using PVC. They disagreed. So he started a competing company that doesn't compromise on that value and leads by example in many other ways such as manufacturing quality products in the USA. They meet their bottom line through innovation and embrace their-self imposed limitations as part of their business culture. I recently met Dwight and other environmental leaders at the Opportunity Green Conference and Dwight's comments were a springboard for others in the field.

If there is a moral obligation to innovate, is there also a moral obligation to be philanthropic? Rick Ridgeway of Patagonia used similar language as Dwight: "We have a moral obligation to do our penance as a company...business is harmful to the environment; we are morally obligated to mitigate that harm." As a member of 1% for the Planet, Patagonia has donated over $40M to environmental nonprofits and has become an icon among sustainable companies.

The next question: is it more important to be sustainably innovative or philanthropic? In 1993, New Belgium Brewing Company was giving away$1 for every barrel of beer sold. They asked themselves, as Jennifer Orgolini recalls, "Should we give that much? Should we keep more for greening our own operations?" The company decided that their dollars could be effectively used in both ways. Some environmental progress is better done by nonprofits and the world needs both innovative companies and funding for grassroots environmental efforts.

It's an important distinction that companies do need to be both leading by example and giving to organizations that can do other things better than they can. A coal mine giving away money to a land trust is different than a sustainably-minded company supporting causes that extend their values. Of course, it is in these company's best interests to support environmental nonprofits: Patagonia's customers won't have anywhere to use their gear if their favorite mountain trail becomes a housing subdivision and New Belgium acknowledges that "no fresh water means no great beer." There's nothing wrong with a symbiotic relationship.

The fact that environmentalists are using words like "penance" and "moral" is fascinating. I emerged from an evangelical Christian background. In that culture, the prevailing view--not held by everyone of course--is basically that God created the Earth and then created humans to dominate it; we're going to die and go to heaven so why should we care what happens on this planet after that? That's God's problem to save us from. I don't like that the Religious Right has commandeered certain words and concepts. I like being reminded that morals are not just about personal choices like not having sex before marriage; they are about choices to do the right thing for the greater good. (And on a sarcastic note, it gives me a broader platform from which my smugness can emanate.)

Photo Credit: Kerri Feazell

The big game for many social ventures is changing underlying patterns of consumption to create a more sustainable world. Whether they're a new tea company trying to reshape how people engage with the people who produce their beverages or a clothing company trying to source ethically, their biggest challenge is getting consumers to care. A recent advertisement from Chipotle might offer some surprising insights about where to focus the message.

The advertisement reads: "We wanted to have farmers in our ads, but what sells are delicious burritos, not lessons on sustainable farming." The words "We...have...delicious burritos" are in a dark black font, while the rest is in subtle gray.

The premise of the advertisement is to pretty clear: on the one hand, they want you to know that they care and think about the places that their products come from. On the other hand, they also want you to know that what is ultimately important is that their product is delicious.

This reinforces the lessons from the fair trade movement thus far: fair trade can't impose a "tax" for a less tasty or less quality product on consumers. Basically, whatever the product is has to be "good" as judged simply against the quality of other, comparative, non-fair trade products. The way in which it was produced can be legitimately important to a consumer, but still not overcome other deficiencies.

But that doesn't solve the branding question. How much should these ethical, sustainable companies focus their branding and marketing around the story of where their products came from, and how they were produced, versus the traditional emphasis on how they make the consumer feel?

This came up a bunch at the Unreasonable Institute, particularly with ventures like Liga Masiva that are not even just "fair trade" but are actually positioning themselves to embody a relationship between consumers and produces that is even one step beyond that designation.

I tend not to believe that selling the story of social change alone is enough to shift consumer behavior. I'm getting more and more convinced that the right way to come at it is sort of to reinvent the lifestyle brand in a way that is energetic, young (both in terms of age and spirit), and presumes a sort of global interconnectedness and social good aspiration by default.

I think the whole "Lifestyles of Health and Sustainability" (LOHAS) movement sort of goes for this, but I think that it is still a little inaccessible for the average consumer. It's definitely not youth facing in the way that I think many of the companies I know are going for.

Chipotle's ad certainly puts their stamp on the conversation. Letting people know about the sustainable farmers behind their burritos matters, but not nearly as much as the fact that they are delicious.

Photo credit: Nathaniel Whittemore

A couple of weeks ago, the Blue Avocado issued the Just Awards, a cheeky release from the nonprofit sector. The winner of the Award for Abominable Press Coverage was Stephanie Strom for her article in the New York Times, "Charities Rise, Costing U.S. Billions in Tax Breaks." Then, the crowning Award for Narcissism in Philanthropy was handed to the President of the Rockefeller Foundation, Judith Rodin. The sponsors describe the effort as "civil society's pointed mockery of itself," but just like People Magazine's 10 Worst Dressed List the point is not as much self ridicule as a stab at others.

I believe that there's a real use for this kind of platform, but the irony for me goes beyond offering a prize for bad behavior. Digging into the announcement, they name a few runners-up. Though somewhat encrypted, it's not hard to find my favorite. One of them is "a large bank that gives out funding based on American Idol-like popularity contests where nonprofits must urge their supporters to vote for them on the bank's website." So, here we have it, an award taunting an awards program. Now, it gets interesting.

Back in 2007, the Case Foundation started experimenting with online contests through America's Giving Challenge. It wasn't perfect, but they issued a frank analysis of the experience through a 20 page "Assessment and Reflection" report. And, we've seen a lot of followers. Most recently, news and controversy over Pepsi's Refresh Project and Chase's Community Giving Competition (yes, the "large bank") have echoed a lot of the same lessons.

If you're going to do it, you better start with an open, fair and utterly transparent process. Practical pointers include offering a leaderboard, technical support and lots of carnival barking heading into the final votes. By the way, the folks at Blue Avocado chose to remain vague in describing their process (including anonymous nominations), putting new meaning to their use of "Just." If you want to see a pretty interesting discussion of the inside scoop on these kind of contests, check out Global Giving's Chief Business Officer, Donna Callejon, at her interview on UStream. And, stay tuned for even more experimentation; at the latest count, the number of well documented case studies is growing and more are in development.

Another week, another contest. At least, that's what it feels like sometimes in the world of social entrepreneurship. But with an experimental model built around more complex game dynamics, the eBay-sponsored Humanity Calls competition is striving to prove that online giving contests can be more interesting, filling, and fun for nonprofits than skeptics might otherwise believe.

At its core, Humanity Calls is a giving competition, in which supporters of nonprofits can allocate votes to their favorite organizations, with the top voted organizations winning cash prizes. But from that base, HC has done a number of interesting things.

First, the way an organization gets votes is far more game-driven than other voting competitions. Other events mostly follow the one user (i.e. one email address), one vote principle, with some varying it by allowing any registered voter to vote once per day. The upside of this model is its simplicity. The downside is that is tends to inspire fake email registration.

Humanity Calls has a more complicated method through which users can accrue votes. Every participant starts with one vote, but when they donate or share the competition through social media, they get more. A donor who donates $10 to the winner's pool gets ten new votes. A $10 donation to a specific organization results in five new votes. And every time a new voter registers after clicking a link that you shared via Facebook, Twitter or email, you also get an additional vote.

The winner's pool is another interesting addition to the mix. Like a poker tournament, every time a new person puts money in, it increases the total amount in the pool. The full pool will be split between the top 30 vote-getters. eBay put in $50,000 to seed the pool but presumably the organizers are hoping that the pool increases, particularly at the end when the competition gets more fierce.

One of the organizations that opted to participate is San Francisco-based nonprofit design firm Catapult Design, who build technology for the developing world. They decided to join because the contest seemed new and novel, and because it didn't embrace a "winner take all" approach that could be a waste of their time and the time of their supporters.

When people think of industries that are diligently trying to save the world, gambling doesn't jump to the top of most lists. But with a new campaign called "World Series of Good," All Day Buffet founder and poker-master-in-training Mike Karnjanaprakorn is planning to change all of that.

In some ways, poker has a natural affinity with entrepreneurship. Both are, at their core, games of calculated risk. Success involves not just being dealt the best hand, but maneuvering most successfully with that hand. Things can look up or come crashing at a moment's notice.

Perhaps unsurprisngly then, some of the most creative angel investing in the world is coming from poker players. Rafe Furst and Kim Scheinberg, the folks behind the two most talked about new investing models in the social space -- namely, Life Investments (Personal Investment Contracts) and the Presumed Abundance Fund -- are poker professionals and previous poker entrepreneurs.

The World Series of Poker is a series of event that is sort of like Mecca plus the Superbowl all at once for five-card studs. It is a series of tournaments held in Las Vegas each year that culminate in a $10,000-entry-fee main event. Last year, first place in the tournament paid out $8.5 million and more than $175 million was distributed overall.

It was at last year's event that Mike and Rafe began to think about how they could leverage that massive community for social change, and came up with the idea for a "World Series of Good." Their plan is simple and awesome:

In an historic first, the Pulitizer Prize committee has awarded online publication ProPublica a top honor for investigative journalism. On the one hand, the fact that it has taken this long for an online publication to win a Pulitzer marks just how reticent towards the new digital paradigm the journalism establishment remains. On the other hand, the nature of the award reveals that despite business model turmoil, professional journalism remains an essential element of a free society.

When we think about the disruption of professional journalism, it's useful to desegregate the pieces, rather than dealing with the sector as a monolith. So what has really happened?

1. The difference between journalism, the profession and publications, the industry. The first break we need to make in our thinking is to separate the activity of journalism from the industry which grew up to support it. I would argue that the internet disrupts both, but in different ways.

2. Disrupting the business model. It's hard to argue against the fact that the business model of printed news has been disrupted. Newspapers used to be supported largely by 1) classifieds; 2) advertisements, and 3) subscriptions & newsstand sales. These elements all worked together - higher circulation meant higher rates for ads and classifieds. But then the internet created a vastly better market for classifieds, created new outlets for consuming news, and enabled advertisers to pay based on how many people were engaging with their ads rather than on the less precise measure of how many people saw them. The result: a vicious downward cycle for print publications.

3. Unpacking "journalism." The field of journalism includes myriad smaller pieces, but I'd argue that the three biggies are: investigative journalism, news reporting, and editorial or opinion writing. The advent of the internet has brought new voices to the field, particularly in terms of reporting the news and providing opinion, a largely positive advance.

For a few months, I've thought that microfinance was going to be in for a bit of rough patch when it comes to brand. With a new, front-page story in the New York Times yesterday talking about abuses in the field, it appears the time may have come. Unfortunately for all of us, I believe the growing media critique to be often as much about what makes for a compelling narrative as it is about improving the fight to end poverty.

Microfinance has played a tremendously important role in the social change space over the past few decades, culminating in the last half decade or so since Muhammad Yunus won the Nobel Peace Prize. Kiva is one of the best demonstrations we have of the power of the web to build connections between people who never would have been connected before.

But microfinance is not a panacea. Indeed, no microfinance expert would say it is. Even within microfinance, there are a myriad of approaches -- from nonprofit distributed funds that focus on the capacity side of the equation to local financial institutions to now, bigger banks getting in on the game. What's more, there are many who would argue that microfinance aimed at entrepreneurial business just isn't for everyone.

The indignation of yesterday's Times article was about extreme interest rates. That is a fair thing to be nervous about, and combative towards. Of course any time you're dealing with credit for the poor -- whether in the developed or developing world -- there are going to be financial incentives for exploitation. On our shores, Payday Loans keep millions on the dole of creditors, and are increasingly the subject of legislation.

Is social responsibility just a nicer way of saying social control?

Consider Apple CEO Steve Jobs' response yesterday to a question about whether the App Store would remain a closed platform.  Instead of highlighting the company's decision to impose even more draconian limits on app developers, Jobs explained that the iPhone would continue to be restricted solely to pre-approved apps because Apple does not want have a store where "your kids can download porn."

It is indeed true that some have praised the App Store's banishment of apps with sexual content as a way to keep its products child friendly, a necessary step for the iPhone and iPad to scale as educational tools.  However, the company has also come under fire for corporate censorship, not just for violating the ideal of free speech but suppressing socially beneficial apps pertaining to sexual instruction and health.  In addition, Apple has been accused of using the safe-for-kids argument as a cover for anti-competitive activity, with the primary target in the war against unsigned apps actually not being porn, but decidedly unerotic apps from Google, Adobe and emerging businesses that could pose a threat to Apple's iStore iMonopoly.

It's a familiar story to anyone who has studied moral campaigns in American business.  In the 1950s, for example, comic book companies adopted the Comics Code, a set of child-friendly standards that today is generally decried as censorship and a transparent attempt to drive publishers of more mature comics out of business.  However, in its heyday the Comics Code was a paradigmatic expression of corporate social responsibility--a way for the comic book "industry" to "measure up to its responsibilities" by making comics "a unique and effective tool for instruction and education."

Whatever one's particular stance on unsigned iPorn, kid-friendly comics or the oil & timber industries' war on hemp, such controversies highlight a systemic weakness of the the contemporary CSR movement: namely, the facile nature of its ethical claims.

The same fundamental principles used to justify going green and other forms of progressive corporate do-goodery also underly campaigns for business to adopt practices that many social entrepreneurs would decry as censorship, repression or theofascism.  Moreover, we have yet to come to grips with the extent to which CSR is thriving because of the magic moral transformation it performs on what are at base strategies for throttling both established competitors and the startups of the future.

If we want to make the world safer for our kids, perhaps the most important challenge we face is finding better reasons to be good.

Photo credit: SteelSoul

Here's one for the "brand nightmare" category: a major bank decides to close off access to a startup company's business accounts because of "objectionable content" on their blog. Really? In 2010?

If you're thinking, "WTF?" you're not alone. The company in question, fabulis -- a social network for gay men -- is a little curious themselves.

The controversy kicked off yesterday, after founder and CEO Jason Goldberg wrote a post on the company's blog, called "citibank is not so fabulis." According to the post, Goldberg and his team noticed that they no longer had access to their accounts, and when they called to figure out what was going on, they were told that the account had been closed due to their blog's "objectionable content." What's more, the account had been closed a few days earlier without any sort of notification. And worst of all, apparently Citibank is now reviewing the company to determine whether to terminate the account entirely.

There is so much wrong with this I don't even know where to begin. First of all, a bank closing an account because of objectionable content on a blog!? What country do they think they're in? How is that in any way relevant to a bank's business? Okay, if Citibank had to close an account because of suspicious money laundering to terrorists, that'd be one thing. But objectionable content? Are you kidding me?

Let's assume for a second, though, that we're living in an alternate universe and it's reasonable for a bank to turn off the spigot because of a company's blog.

What then might be an acceptable reason? I just spent a little while perusing their blog and there is nothing -- literally nothing -- that any normal person would deem objectionable.

With one big exception, though, because fabulis is a social network for gay men. It describes itself as "the network that connects gay men with amazing experiences down the block and around the world."

Now, homophobia is a much too pernicious and persistent problem in our world

San Francisco Bay Area design firm ZURB loves nonprofits, but they're just not that compelled by the typical style of corporate philanthropy. Accordingly, they've developed their own unique style of giving: For the last three years, they've been holding 24-hour design marathons to help nonprofits achieve some marketing-related goal, and open sourcing the process so others can learn.

The way it works is that each year, the ZURBwired program selects one mission to accomplish for a nonprofit. It can be a new website, publicity for a new fundraising campaign or something else entirely. For 24 caffeine-fueled hours, ZURB, the nonprofit and participating partners rethink the project from the ground up. At the end of it, the nonprofit participant is left with both valuable outputs, as well as a new approach to the design process they can employ every day.

There are a bunch of things I love about this:

1) Putting creativity and human capacity at the center of the equation. I think a shift's taking place, in which people are beginning to recognize that the supremacy of human capacity -- rather than just financial resources -- lies at the heart of any endeavor's success. ZURBwired puts that fact right at the center of their process.